What You Don’t Know May Cost You in Time, Money, And Happiness in 2023
When buyers enter the process of purchasing new construction unrepresented, they typically don’t know all the questions they should be asking, nor the protections that should be put in place on their behalf. They unwittingly put themselves at a distinct disadvantage contractually, financially, and as it relates to making the right decisions for their lifestyle goals.
By working with a Realtor who has extensive experience in the local market AND expertise in Sarasota’s new developments, buyers can ensure they are equipped to make fully informed decisions. Having someone that is advocating for their interests every step of the way leads to more favorable outcomes and peace of mind.
Working with a Realtor vs. Going Direct
We interviewed sales representatives and industry veterans of the most coveted new construction projects in Sarasota about this question- including the Ritz Carlton Residences & The St Regis Residences Longboat Key Resort. We also consulted Nicole Christie, a Real Estate Attorney at Williams Parker Law Firm.
WHY should buyers work with a seasoned Realtor for new construction purchases? Here are the top 4 reasons they collectively shared:
1. You Don’t Get a Better Price if You Work Directly With the Developer.
It is a common misconception among buyers that if they do not have a Realtor, they will get a better price. Realtor compensation is already built into the financials of each project. Each developer/builder wants to sell their product. They rely heavily on Realtors to bring them customers. You as the buyer do not save if you don’t use one, nor does it cost you more if you do (see #4).
For a data point on the now completed Ritz Carlton Residences in Sarasota’s Quay District, 60% of the purchasers were brought by a Realtor. For another Ultra-Luxury project on Lido Beach, The Rosewood Residences, that number is closer to 80%.
If you are not represented by a professional who fully understands the dynamics of the local real estate market – both existing inventory and new construction – you are in fact putting yourself at a disadvantage on a variety of fronts.
“I believe that one of the most common misconceptions from buyers is that if they do not have a Realtor representing them, they will get a better deal from the developer. This is completely untrue.”
2. All New Construction Contracts Favor Developers/Builders.
New Construction contracts and associated condo documents can be a daunting hundreds of pages long. A savvy Realtor knows how to guide you on what things may be negotiated on your behalf, introduce options that you may not have even considered, then work as your advocate to get the most favorable terms. This could be internal modifications to the build out. You may want to alter the floor plan and/or ask for design upgrades. It may also be changes to the contract itself — for example, you want to add performance benchmarks or financing thresholds to hold the developer more accountable.
We have our finger on the pulse of the market and are able to identify which resources and experts to bring to the table for every specific buyer’s needs. For example, we can introduce our buyers to specific local attorneys that have had success negotiating with a particular developer.
Our experience negotiating with each specific developer enables us to get as much accomplished for you as the buyer as possible. We can tell you if something is reasonable or if it’s not reasonable. We understand what details should be flushed out at the contract stage all the way through to how to protect your interests during the final walk-through prior to closing.
“Lee adds incredible value to the buyer’s home purchasing journey in a number of ways. His previous experience working with buyers in new construction projects allows his buyers to feel confident with the decisions they make. They can rely on his good judgment with things like price, availability, and quality.”
What is an Amendment?
Modifications to contracts are called amendments. Amendments spell out changes a buyer wants to make to the developer’s contract. Amendments are made to clarify developmental milestones such as release of money to the developer, or requirements that the developer sell a certain number of units. They can also address internal design modifications such as additional closet space, livings spaces, or doors/walls.
Amendments are drawn up after the buyer goes to contract and within the 15-day recission period that is spelled out by Florida statute. This 15-day period is legally provided to all buyers of new construction.
To provide two examples:
- We have a client at The St Regis Longboat Key Resort who modified a closet space to add a bunk room to accommodate their young grandchildren. They also were able to carve out a desk space from the existing wet bar that enabled them to have a private office nook.
- Another luxury waterfront condo buyer reserved the right to cancel if the developer did not have a construction loan in place by a certain date.
Amendments are typically written by the buyer’s real estate attorney with input from the Realtor and the developer’s sales rep. Negotiations may take several iterations for both parties to find common ground and come to an agreement.
3. Working With an Experienced Realtor Empowers You to Feel Confident About Your Decisions.
Your real estate purchase is one of the biggest investments you make. It is important to understand all the options and the trade-offs when comparing the builders, the brands, locations, floor plans, resale potential, and relative pricing so that you know you are making the right decision for you.
We understand the local landscape and can provide comparables for historic, current, and future pricing on a property. We help you understand if a specific property’s value is going up or down in the future based on what is happening around it.
When you partner with us, we will ask you the hard questions to get you to think about what you really want. These types of conversations are important to get to what is the best match for you personally.
To provide a reference point, if you are looking at Downtown Sarasota New Construction, there is a distinct personality to each area. The lifestyle and amenities available at The Quay is unique to The Rosemary District or Golden Gate Point. None of these is better or worse, just different. We feel it is super important to understand all these subtleties when evaluating the best match for any specific buyer.
Even within a single building, there is an array of choices. Let’s take a beachfront building like Rosewood Residences Lido Key where are on the surface it may seem that the units are fairly homogenous. However, you will have a different experience based on the floor plan and level you choose. Lower floors provide more connectivity to that water, more sounds of the environment. Higher floors offer bigger, broader views. And yet, because the water is not as close you may not feel as connected to it. This is just one example of the many factors we help you to consider.
“A good Realtor helps frame the tradeoffs not only between two new construction projects but also between a new project and an existing community. Also, it allows buyers who are relocating or who may be newer to a certain area to have local experts who can educate them about future growth and development or lifestyle differences that may not be readily apparent.”
4. It Costs You Nothing to Have Professional Representation.
In fact, there may be costs to NOT having it. Realtors’ compensation is paid from the proceeds of the Seller, so there is no financial outlay for you as a buyer.
Our team works systematically to help each buyer process every option available to them, gain clarity on what they are NOT choosing as much as what they are, and emerge with peace of mind that they are making the right choice for their needs. Our real estate market offers diverse products, price points, and lifestyle experiences. The goal is to ensure our clients’ financial and lifestyle goals have been thoroughly addressed, ensuring their long-term happiness and enjoyment.
Is New Construction Really Right for You?
Many buyers in our Sarasota Real Estate market are drawn to the idea of buying into new construction projects. The allure of new is driven by the investment value of buying at pre-construction pricing, the intrigue, and ease of having the latest in design/technology and building codes, and sometimes because of the sheer lack of existing housing inventory.
There are situations where buyers — particularly those new to the Sarasota real estate market — are lured into the “sexiness” of new construction, but then as we take them on a deeper dive into their wants and needs, we figure out that new construction may not actually be the best match for them.
💡 Pro Tip:
We had a buyer who was new to the Sarasota real estate market. He initially inquired about One Park in The Quay district in Downtown Sarasota. When we engaged him on the journey of learning what lifestyle he really wanted here, it became clear that Downtown was not the right match for him and his family. This sort of upfront homework is priceless when it comes to long-term happiness.
The number of choices one has in the Sarasota real estate market begins to multiply when you consider the living experience within each geography. There are various areas of downtown, the mainland, or each distinct barrier island. Each area is then comprised of many distinct neighborhoods, and then even each street has its own feel and character.
Geography aside, there are a series of trade-offs involved in considering house vs. condo, bay view vs. gulf view vs. canal view, boating water vs. beach, old vs. new, updated vs. needs work, resale value, condo or HOA fees, floor plans, etc., etc.
Drilling even deeper, if one is considering a specific new construction project in Sarasota such as One Park, there are 11 distinct floor plans. The price of the units varies according to the level they are on, the direction they face, the square footage, etc. We carefully evaluate with each buyer the considerations regarding which may have a view and which won’t, if that view can be obscured based on what we know about future construction, which sides of the building may be more desirable based on sun patterns, noise, etc.
Good Advice Pays Dividends
Sarasota is now in its third century and going through many amazing changes. What it is going to look like in the next several generations is very different than what it is now. It pays many dividends to be thoughtful and thorough in your lifestyle and financial investment.
Whether a buyers or sellers real estate market, good information should not be considered a luxury especially when transactions are $1M, $5M, or even $10M.
Make sure you have great advice so that you have financial and lifestyle decision that you are proud of for many, many years to come. Any questions, call us at 941 587 0740.